Pizza is a 145-billion-dollar global industry with average sales at independent pizzerias, and PMQ’s Pizza Power Industry Reports find that U.S. sales average just over $600k annually. Over the past several years, the demand for pizza has risen all over the world, especially in Latin America and China, and U.S.-based pizza chains still reign supreme.
According to the latest Technomic’s Pizza Consumer Trend Report, 15% more American consumers report eating pizza every week than just two years before. In China, international pizza chains plan to open nearly 1,300 new stores in 2019 alone.
The industry is thriving as it adapts to new consumer demands and the evolving technology landscape.
Both independent and chain pizzerias are holding their own in the industry with 41% and 59% of U.S. sales, respectively. Independent pizzerias saw a net gain in store openings over the past year, while chain pizzerias saw a small net loss.
Before 2017, PMQ’s Pizza Power Report separated pizzerias into different categories depending on service type (Quick, Full, or Limited) and Fast-Casual. Over the past two years, though, their reports have become more accurate, and report higher industry earnings, as they found a new way to incorporate all restaurants with pizza as a main menu offering.
Fast-Casual restaurants such as Mod Pizza saw huge growth between 2008 and 2015 as consumers sought quick but healthy alternatives to fast food. Now these Fast-Casual restaurants are holding steady, and the driving factor for all pizzerias, independent or not, is keeping up with the demand for technology-based ordering and delivery.
While people in the late ’90s thought online ordering through PizzaNet might be a prank, today, online ordering makes up the majority of business for pizza chains. Since 2008, pizza giant Domino’s has offered online ordering, and it has steadily increased in popularity as more and more consumers prefer to use technology over talking on the phone. Consumers want orders to be fast, simple, and convenient, and online ordering offers that precision and speed.
Even faster than ordering online from a desktop, today’s consumers are turning more and more to their smart devices to request pizza deliveries. Domino’s, a company that has been referred to as “more of a tech company” than a restaurant chain, reports that half of its digital sales come from mobile ordering
With the rise of third-party delivery services with their own online and mobile ordering systems like DoorDash and Uber Eats, even independent pizzerias can cash in on delivery. Of course, these services do pass on fees to the consumers, and their timing cannot be guaranteed, so many restaurants are appropriately wary.
Consumer concern around and demand for high quality, fresh, and healthy ingredients has taken precedence in the U.S. pizza market for many years now. Pizza chains include nutritional information about their ingredients and use “authentic” and “all-natural” as key selling points.
In the U.S., these fresh, healthy pizzas are also advertising their locally sourced ingredients. The authentic tie-ins
relate to pizza’s Italian roots and ingredients that bring to mind the staples of this long-time American favorite. Consumers still rated taste as the most important consideration in their pizza choice but followed that with the
importance of fresh, quality ingredients.
Despite Americans’ insistence on classic pizzas, one popular new pizza market is the breakfast pizza. The convenience store 7-Eleven reported that their breakfast offering was their second best selling pizza in 2018. Other trends include “regional” pizzas (e.g. Detroit-style, midwest style, etc.) and pizza toppings with international flare
or varying levels of spice.
Keto pizzas are flying off Rockstar Pizza’s ovens according to owner Ron Mathews in a 2018 PMQ article. Large chains offer gluten-free crusts and even vegan pizza options. With an increase in food allergies (affecting 7% of children in the U.S. according to one 2019 BBC article) and food sensitivities, consumers are flocking to these new menu offerings.
Pizzerias and chains in other countries offer toppings and ingredients that draw on local palates. In India, pizzerias offer multiple vegetarian options, and in Korea, toppings include bulgogi and kimchi. Some Mexican pizzerias offer crusts made with blue corn, and in China, toppings include seafood and deemphasize cheese. Market growth is up all over the world and predicted to keep increasing.
Millennials and Generation Z continue to drive the pizza market with their demand for mobile ordering and fast, easy availability. Additionally, young consumers look for loyalty programs to direct their purchasing, with 42% of those surveyed in PMQ’s Pizza Industry Census saying they subscribe to loyalty programs. The majority of chains are responding with “Buy 12, Get One Free” style promotions for loyalty members
Increases in the minimum wage have proved challenging for pizzerias that may have to pass on price increases to
consumers. Additionally, pizzerias tend to experience high turnover and, more recently, difficulty acquiring help in the strong labor market.
Similarly, the demand for authentic, local, quality ingredients raises the cost for pizza makers who have to find the right balance between giving the customer the product or the price they want. Nutritional labels have posed a challenge to pizza chains that were initially required to post the nutritional values of an entire pizza as one serving. Once adjusted down to a per-slice value, they still found it difficult to account for slices in a square pizza where some include more crust or more cheese than others.
While the pizza industry continues to grow, independent pizzerias and large pizza chains only thrive when they cater to the nutritional, lifestyle, and technological demands of the consumers.
Already under development and soon-to-come advances in the pizza industry include robotic pizza prep and self-driving delivery. Heavy-hitter combos like Pizza Hut and Toyota and Dominos and Ford are already set to unveil such advancements in the next year.